Short Description:
Hong Kong’s Securities & Futures Professionals Association calls for a softer implementation of OECD’s crypto reporting standards to mitigate compliance risks while bolstering the city’s crypto hub initiative.
Read Time:
3 minutes and 45 seconds
Main Article:
The Hong Kong Securities & Futures Professionals Association (HKSFPA) has strongly urged the local government to reconsider its approach to implementing the Organisation for Economic Co-operation and Development’s (OECD) new crypto reporting standards. Specifically, the HKSFPA expressed concerns that the OECD’s Crypto Asset Reporting Framework (CARF) and its related Common Reporting Standard (CRS) amendments might create undue operational and liability pressures for local financial institutions.
The CARF’s introduction aims to facilitate automatic tax information exchange among crypto asset users globally, while the CRS primarily deals with traditional financial accounts. As one of 76 markets committed to adopting CARF, and among the 27 jurisdictions slated to initiate data exchanges by 2028, Hong Kong finds itself at a pivotal crossroads in balancing regulatory compliance and its ambition to become a leading crypto hub in Asia.
Despite its support for certain initiatives, such as the registration of crypto service providers and expanded transaction reporting, the HKSFPA advocates for more manageable conditions, particularly for entities with minimal reporting activity. They stress the importance of stronger personal data protections and suggest allowing companies to transfer record-keeping responsibilities to regulated third parties when operations cease. Uncapped penalties per account and personal liability for directors could lead to heightened compliance risks, prompting the association to call for clear penalty caps and protections for companies acting in good faith.
As Hong Kong strives to establish itself as a regulated crypto haven, it faces mounting pressure to adhere to CARF and CRS compliance standards. The city’s licensing regime necessitates that centralized exchanges serving local investors comply with stringent Know Your Customer (KYC), Anti-Money Laundering (AML), and market abuse regulations. Notably, as of early 2026, 11 crypto trading platforms, including well-known names like Hashkey Global and OSL, have gained authorization from the Securities and Futures Commission (SFC) to operate formally.
Globally, CARF is set to transform crypto tax reporting, with early-adopter jurisdictions actively collecting data from exchanges regarding tax residency, transaction balances, and activities. By 2027, a total of 48 jurisdictions, including the United Kingdom and several European Union member states, are expected to execute their first cross-border exchanges of crypto reporting data, based on information collated in 2026. This push towards standardized crypto reporting underscores the sector’s evolving landscape and the increasing need for cooperative compliance mechanisms.
Short Summary:
The HKSFPA highlights the need for a balanced approach to implementing OECD’s crypto reporting standards in Hong Kong. By advocating for lenient regulations and robust data protections, the association aims to mitigate compliance risks and support the city’s goal of becoming a leading crypto hub while remaining compliant with global standards.
